Sony has announced the PlayStation 4. The next-generation computer entertainment system will hit the market this holiday season. But is it enough to compete with the next version of Microsoft's market-leading Xbox? Or help revive the struggling video game industry?

Sony used a lot of hyperbole in its announcement, with phrases like "redefines rich and immersive game play" and "powerful graphics and speed, intelligent personalization, deeply integrated social capabilities, and innovative second-screen features" and "push the boundaries of play."

It also left many questions unanswered, including what the console will actually look like -- no models were displayed -- and how much exactly it will cost.

Before we get into how Sony plans to back up all its hype, let's check in with Rob Enderle, principal analyst at the Enderle Group, who has been covering the video game industry for decades. When we asked Enderle about the PS4, he offered pros and cons.

Attractive Pricing

"The system is clearly heavily cost-reduced to be sold in the $300 price range which is far more attractive to their typical target audience," Enderle said. "This makes the use of the AMD APU technology inspired because it gave them the performance they wanted at a price that was far more acceptable to the market."

The PS4 system architecture is centered on a custom chip that contains eight x86-64 cores and a state of the art graphics processor. Sony beefed up the Graphics Processing Unit so it could handle general purpose computing tasks like physics simulation. The GPU boasts 18 compute units, which collectively generate 1.84 teraflops of processing power that can freely be applied to graphics, simulation tasks, or some mixture of the two.

The PS4 will come equipped with 8 GB of unified system memory. GDDR5 is used for this memory, giving the system 176 GB per second of bandwidth and boosting graphics performance. Enderle told us this is a significant performance upgrade on the PS3, and the game demonstrations were stunning.

"With most of the current crop of game designers working on tablet and smartphone platforms and this new PlayStation requiring games that won't play on the old system, getting developers to develop for this platform is where the heavy lifting will be," Enderle said. "Right now the console game market isn't very healthy for anyone and both they and Microsoft are exploring media streaming to close the loop."

However, he added, media streaming increasingly can be done directly by Smart TVs, weakening that strategy. Enderle believes both the full refresh of the PlayStation and Xbox are coming three to five years too late, and the delay will make recovery of the market more difficult than it would have been had it been more timely.

A Social Thrust

With an emphasis on social across all things , PS4 puts social in the center of the gaming experience. Sony is building new features into the foundation of the system's hardware architecture. For example, gamers will be able to share their wins by pressing a button. Gamers simply hit the "SHARE" button on the controller, through the last few minutes of game play, tag it and return to the game -- the video uploads as the gamer plays. Gamers can also share their images and videos to friends on social networking services such as Facebook.

The PS4 will allow what Sony calls "social spectating" by letting gamers broadcast their game play in real-time to friends using live Internet streaming services such as Ustream. During live broadcasts, friends can make comments on the streamed game play. If a gamer gets stuck on a challenging level, friends can also join the game in completely new ways. For example, friends can offer health potions or special weapons when a player needs them most during actual game play.